How it works

Once you have made the decision to implement a childcare voucher scheme, there are a number of steps that need to be taken, which Sodexo Pass can help you with.

There are a number of HMRC qualifying criteria that must be adhered to for the tax and NI exemption to be made: 

• The scheme must be offered to all employees where the scheme operates.

• Employees can only use the vouchers to pay for registered or approved childcare. For more details please follow this link.

• The amount of vouchers which can be taken by employees free from tax and National Insurance contributions is capped at £55 per week (£2,916 per year). See HM Revenue & Customs.       

• You must also always ensure that employees' net pay (salary after vouchers) does not go below £97 per week or £421 per month.  This is to ensure the minimum amount of NI is paid and employees' state benefits, such as Statutory Sick Pay, are not affected.

• The scheme must be available to all employees. See HM Revenue & Customs. 

• Childcare vouchers can be used to pay for all children up to 1st September following the child's 15th birthday, or 1st September following their 16th birthday if the child is disabled. See HM Revenue & Customs.

• The employee paying for the child's care must be either the parent or step-parent of the child, or the child lives with the employee and they have parental responsibility for that child. See HM Revenue & Customs.

About childcare vouchers

E-vouchers work like an online bank account. Employees have an e-voucher account which is credited with vouchers each pay period.  They have the control to pay their carer when they want and can easily monitor and review their payments. Payments to carers can be made on an ad hoc basis or set up to take place regularly. To find out more visit https://childcarepass.co.uk.

Paper vouchers work like cash.  Vouchers arrive at employees home addresses on payday and are used to pay their carer who then redeems the vouchers through Sodexo Pass.  All vouchers have a life of over 12 months.  

Most carers are happy to accept childcare vouchers as payment.  Sodexo Pass ensures that it is as easy and hassle-free as possible.  E-vouchers are the easiest format for carers as they simply receive notification when a payment has been made to their bank account.  In the case of paper vouchers, carers can redeem the vouchers via the method which suits them best - email, Freepost or Freephone.  Sodexo Pass then credits the carer directly into their bank account.  For information for carers click here.

All voucher credits or deliveries are timed to arrive on payday. 

<< Back